Mass (Economic) Hysteria: Income Inequality and Related Themes
20th February 2014
Consider income inequality. Not only is there inequality — which should be unsurprising, given inequality of ability, ambition, etc. — but there is supposedly a growing gap between America’s “haves” and “have-nots.” A do-gooder would leave it at that. Not being one of them, I’ll ask the questions that they’re unwilling/afraid/too-jejune to ask:
- What is a have? Is it someone/a household whose income exceeds the median for all persons/households? Is in the top 20 percent of all such incomes? The top 5 percent? The top 1 percent? The top 0.1 percent? (Pick your favorite point along the continuous curves in the graphs here.)
- Or is a have defined by his/her/its wealth? And, if so, how? (See preceding bullet.)
- Do haves “rig the game” so that they are, in effect, stealing from have-nots?
- If haves are clever and determined enough to do that, isn’t it likely that they’d still be haves without “rigging the game”?
- Is one’s economic status a permanent thing, or do people in fact move up and down the economic ladder during their lifetimes?
- Are the have-nots of today — who, mostly, aren’t the have-nots of yesteryear — really worse off than their predecessors, or are they really better off?
- Are they worse off relatively?
- Will tomorrow’s have-nots be better off if the haves are deprived of income/wealth through redistributive actions taken by government?
- Or will redistributive actions simply make haves worse off and less likely to do the things that make have-nots better off (e.g., give huge sums to charity, invest in growth-producing investments)?
Questions 1 and 2 are unanswerable; the distinction between a have and a have-not is purely arbitrary. (It has been said, with some accuracy, that a rich person is someone who has more more money than you.) The answers to the other questions are: (3) only to the extent that some of them are aided by government through perverse regulations favored by do-gooders; (4) yes; (5) not permanent, plenty of movement; (6) better-off absolutely than earlier have-nots; (7) probably about the same, relatively, but they’re mostly different people; (8) worse off; (9) yes, redistributive actions make have-nots worse off by hindering economic growth. (For more, see the list of readings, below.)